The Dollar Index could be bullish towards 104 while Euro is headed towards 1.0850-1.08. USDCNY is rising towards 7.20. EURJPY is holding below 162 and USDJPY seems to be stable above 148 with scope for a rise towards 149/150. Aussie and Pound have fallen sharply contrary to our expectation of further rise towards 0.67/68 and 1.29/30; instead, the prices are now headed towards 0.65 and 1.27 respectively. EURINR is headed towards immediate support at 90. USDINR may attempt to test 83.05/10 with downside limited to 82.80.

Dollar Index (103.468) the index rose sharply from the interim support around 102.75 as expected and it even tested our mentioned target of 103.50 on the upside. A further rise to 104 looks likely. Broader range of 102-104 can hold for the near term.

EURUSD (1.0874) has come down significantly as expected and can test 1.0850-1.08 before it rises back stronger in the medium term. A wide range of 1.10-1.08 may persist for a couple of weeks.

EURJPY (161.42) tested 161.91 but is struggling to break past 162 on the upside. A decisive break above 162 if seen can set near term targets of 163-164 else it would be vulnerable to fall back to 160.

Dollar-Yen (148.45) looks stable above 148 for now and if the rise sustains, can test 149/150 in the near term before eventually coming down.

USDCNY (7.1959) has risen further towards 7.20. A break above 7.20 is needed for the pair to see a bullish breakout.

Aussie (0.6559) has not been able to sustain above 0.66 for long and contrary to our view of seeing an extended rise to 0.67/68, Aussie has fallen sharply and could test 0.65.

Pound (1.2730) also came down sharply and is targeting 1.27, contrary to our expectation of seeing a rise to 1.29 and higher. A fall below 1.27 is not expected for now but the level might hold as decent support. Price action around it would be important to watch.

USDINR (82.8225) closed at 82.8225 yesterday but quotes 82.95/97 on the NDF offshore markets. There is scope that the pair opens with a gap up today on the onshore markets and attempts to test 83.05/83.10 on the upside while downside is likely to be limited to 82.80.

EURINR (90.2209) is also falling sharply within the 91-89 range. It is to be seen if the pair bounces from immediate support at 90 or falls to the lower end of the mentioned range.

The US Treasury and the German yields have risen sharply. The Treasury yields have risen past their intermediate resistance and have potential to rise further. The German yields continue to move up in line with our expectation. The 10Yr and 5Yr GoI have inched up slightly. A further rise looks possible before the broader downtrend resumes.

The US 10Yr (4.29%) and the 30Yr (4.43%) yields have surged breaking above the key levels of 4.2% and 4.35% respectively. While this sustains, a test of 4.4% (10Yr) and 4.6% (30Yr) can be seen and then a reversal is possible.

The German 10Yr (2.42%) and the 30Yr (2.57%) yields are moving up in line with our expectation. 2.6% (10Yr) and 2.7%-2.8% (30Yr) can be seen on the upside. 2.2% (10Yr) and 2.35% (30Yr) are important supports.

The 10Yr GoI (7.0401%) remains stable inside the 7.04%-7.05% resistance zone. A rise to 7.08%-7.1% is possible if a break above 7.05% happens. The broader view will however remain negative to see a fall to 6.95%-6.9% and 6.8% while below 7.1%.

The 5Yr GOI (7.0422%) has inched up above 7.04%. While this sustains a test of 7.06%-7.07% is possible. An extended rise to 7.1% also cannot be ruled out.

Dow Jones and DAX struggles to rise past 39K and 18K respectively, which could make them vulnerable to a fall in the near term. Nifty had seen a recovery yesterday but is vulnerable to a fall while below 22200-22250. Nikkei is stuck in a narrow range of 38k-39k. Resistance mentioned on Shanghai is holding well.

Dow (38905.66, -0.35%) is struggling to sustain above 39000. A break below 38800 will be bearish to see a fall to 38500 and lower.

DAX (17942.04, -0.11%) is oscillating around 18000. A dip to 17800-17700 is a possibility. But 17700 and 17500 are good supports while above which the rise to 18200-18500 will still remain alive. A fall below 17500 is needed to negate that rise.

Nifty (22146.65, +0.68%) has risen back well above 22000. A sustained rise above 22250 is needed to bring back the bullish chances of seeing 22800-23000 on the upside. Else a fall back to 21500 cannot be ruled out.

Nikkei (38768.50, -0.25%) trades in a narrow range of 38000-39000. While above 38000, there could be chances of rise towards 39500-40000.

Shanghai (3029.68, -0.28%) has declined towards 3000 as expected. A further dip towards 2950 looks possible while below 3060-3065.

Brent has broken its crucial resistance and has potential to rise further in the near term whereas WTI can head towards its key resistance zone. Gold, Silver and Copper have come down but have near term supports coming up which may hold and lead to a bounce back. Natural Gas has recovered but needs to rise past 1.8 for increased bullishness.

Brent ($ 85.26) rose to $ 85.69 yesterday, breaking above the crucial resistance at $ 85. It has potential to rise to $ 87.5 and then $ 90 while it sustains above $ 85-84.

WTI ($ 81.15) has risen sharply above $ 81. A test of $ 82-83 or even $ 84 looks possible. If $ 83-84 holds, a fall might be seen towards $ 80.

Gold (2166.80) remains ranged within 2150-2200. There could be chances of rise towards 2230-2250 while it remains above 2150. Only a decisive break below 2150, if seen, would be vulnerable to a fall towards 2120-2100.

Silver (25.13) has come down from a high of 25.37. Immediate support is at 24.80. While that holds, the possibility of rise towards 25.50-26.00 or even 26.30 will remain there.

Copper (4.0595) has fallen back after testing 4.08. Immediate support is seen at 4.01. If that holds, a further rise towards 4.20-4.30 can be seen in the coming days.

Natural Gas (1.7580) has bounced back sharply from a low of 1.6430. We had expected it to come down towards 1.5 and then to bounce back from there. A decisive break above 1.8, if seen, could pave the way for 2.0. Overall a broad range of 1.5-2.0 can hold for some time.

13:00 18:30 IN Trade bal
Expn -17.12$ Bln …Expected – …Previous -17.49$ Bln

13:15 18:45 US Industrial Production
Expn 0.1% …Expected 0.0% …Previous -0.1%

13:15 18:45 US Capacity Utilization
Expn 78.7% …Expected 78.4% …Previous 78.5%

DATA YESTERDAY
—————
6:30 12:00 IN WPI
Expn 0.25% …Expected 0.25% …Previous 0.27% …Actual 0.20%

12:30 18:00 US PPI
Expn 0.0% …Expected 0.3% …Previous 0.3% …Actual 0.6%

12:30 18:00 US PPI ex Food & Energy (MoM)
Expn 0.8% …Expected 0.2% …Previous 0.5% …Actual 0.3%

12:30 18:00 US Retail Sales (MoM)
Expn -0.34% …Expected – …Previous -1.06% …Actual 0.60%